Global Business Environment Report

This report analyzes the global business environment, focusing on the key factors that drive global trade and commerce. It examines the strategic challenges faced by organizations operating globally, the impact of globalization on organizational functions, and various ways to make effective decisions in a global context. The report also discusses the barriers to internationalization and concludes with the importance of ethical practices for organizations expanding their businesses globally.

GLOBAL BUSINESSES
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
P1: The main key factors of market, cost, environment and competition in order to drive
global trade and commerce.........................................................................................................1
TASK 2............................................................................................................................................3
P2. Strategic challenges faced by organisation while operating in global environment............3
TASK 3............................................................................................................................................4
P3. Causes of globalisation on organisational governance and leadership, structure, culture
and functions...............................................................................................................................4
P4. Effects of ethical and sustainable globalisation on organisational functions.......................5
P5. Various ways through which decision making can work effectively in global context.......6
P6. Assorted routes to internationalisation which can adopt by organisation, including key
barriers.........................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
.........................................................................................................................................................8
INTRODUCTION
The global business environment is referred as the overall environment in various
sovereign countries along with the exogenous factors to home environment of the organisation

that directly in indirectly influence decision making on resource uses and capabilities. The global
business environment can be classified into two different categories which mainly includes
external as well as internal environment (Apăvăloaie, 2014). The main issues that faced by
global business are entirely different in compare with the domestic firms. There are many factors
that includes political, economic and legal infrastructure of different countries that affect the
overall global business environment. This report mainly covers about the SASOL Limited which
is one of the fastest growing energy and chemical organisations that is South Africa based and
expanded their businesses in various countries which includes Canada, Gabon, Australia and
Mozambique. This report mainly covers about the key factors of cost, environment and market
that directly drive global commerce and trade. This report covers about the strategic challenges
and the influences of globalisation on organisational governance, leadership, structure, culture
and functions. This report also emphasis on the influence of globalisation in decision making and
strategy.
P1: The main key factors of market, cost, environment and competition in order to drive global
trade and commerce
Global environment plays very crucial role in order to understand the overall scenario of
the organisation to expand the business world wide. Whenever organisations tries to run and
expand the business in a new geographical region they faces various problems that are related to
barriers, taxes and competitors legislations. In order to drive global trade and commerce, it is
crucial to emphasis on the key factors of cost, market, environment and competition to gain
competitive advantage. This factors directly and indirectly affect the reputation and profitability
of a firm. In context with SASOL Limited, it is really very crucial for the managers to analysis
key factors of market, cost, competition to expand the business world wide. Some of the
elements are discussed below:
Competition: Competition act as one the main element that should be undertaken in
appropriate manner by the SASOL Limited while expanding their business worldwide.
Competitors of the organisation directly and indirectly affect the productivity and profitability. It
is important for the organisation to analysis the competitive products in the market along with
the advance technology that is adopted by the competitors. Through this analysis it becomes
very easy for the top management authorises of the organisation to take beneficial actions and
decision in order to enhance their performance and attain competitive advantage in order to

compete the competitors(Belás and et. al., 2014). Through proper analysis of competitor
strategies SASOL Limited are able manufactures products and services according to the needs
and wants of costumers. SASOL Limited is energy and chemical company that analysis the
competitors techniques and strategies in order to expand their business in various countries by
taking effective decisions.
Cost: In order to effectively expand the business world wide it is crucial for the
organisations to allocate the important elements that directly aid organisation to reduce the prices
of services and products. This directly allows organisations to gain attention of the customers in
high quantity numbers. Therefore, it is important to analysis the manufacturing of quality
products with low amount. By analysis of requirements of customers , management fix and target
to produce product and serve services at low cost as per as required by the customers. In context
with SASOL Limited, it is compulsory for the high management authorities to properly allocated
the elements so that cost of the products and services can be minimised in order to sustain well in
the market of South Africa (Axelrod and VanDeveer, 2014).
Market: In order to expand and sustain in the new market or new geographical area it is
very crucial for the organisations to overview and analysis the market area or marketplace in
order to prepare effective marketing strategy in order attain competitive advantage. In order to
hit the the targetted market it is very crucial to analysis the market environment so that proper
planning and strategy formulation can be done by the organisation. Expanding business in the
new geographical area consists of various risks that directly create an impact on productivity as
well as manufacturing of products. In context with the SASOL Limited, it is compulsory to
analyse the market place and market share before expanding the business in new geographical
areas. SASOL Limited need to understand and analyse customers needs and competencies in
order to give tough competition at globalisation level.
Environment: Environmental analysis is another important element that is considered by
high authorities of SASOL Limited in order to manufacture goods and services according to the
requirements. With the help of environmental analysis it becomes simple to identify those
products that are in need and demand of the customers. Moreover, the demand of the customers
also varies time to time, through proper environment analysis SASOL Limited is able to
recognize the needs and demand of the products in the market. SASOL Limited uses PESTLE

analysis tool in order to identify all the external factors that directly and indirectly affect the
organisation at globalisation level (Carneiro and Brenes, 2014).
It is very crucial for the SASOL Limited to work and analyse on all the above discussed
factors before entering in new geographical area with their products and services. This will help
SASOL Limited to gain competitive advantage and work accordingly to enhance profit margin.
TASK 2
P2. Strategic challenges faced by organisation while operating in global environment
In order to be more competitive in this competitive world, organisations are out looking
to expand their business along with their product and services at global level . Organisation
emphasis on product development and alterations in their products and services to become
unique in the marketplace. Many organisation uses internet facilities in order to deliver product
and services. Organisation are using online applications that allows customers to purchase
products from home. The organisations has developed different strategies in order to serve
various facilities to customers that mainly involves buy one get one free, home delivery and
discount & offers that maintain the interest of customers for long time duration. Different
countries has different cultures and environment therefore, SASOL Limited has to face
complexities in order to develop and implement new plan of action. Some of the issues that
SASOL Limited faces at international level are discussed below:
Customer expectations: The high authorises and managers of SASOL Limited should
analysis the factors that will develop issues in order to operate business at global level. The
needs, demands as well as expectation of the customers varies location to location or areas to
areas. In some location the product demand is very high when compared to other location. It is
essential for the SASOL Limited to properly analysis the demand and need of the organisations
and take decision accordingly. With this analysis it become easy to make modifications in the
products as per as requirements. SASOL Limited outlook for the needs and demands of the
customers and make modification to raise the value of product in order to raise market share at
global level (Cavusgil and Knight, 2015).
Cost: While carrying various operational activities at international level, there are various
risks that is associated with it. The organisations also faces many issues while planning and
developing marketing strategies. While operating at the global level and introducing new product

in new geographical area cost of products are fixed on the basis of excise duties, taxes etc. The
high authorises and mangers of the SASOL Limited emphasis on the various strategies through
which they can reduce down the prices of product and services.
TASK 3
P3. Causes of globalisation on organisational governance and leadership, structure, culture and
functions
Corporate governance is considered as the application of best management practices
along with the compliance of law in order to adhere to ethical standards for making effective
management along with proper distribution of wealth and discharge of social responsibility.
Corporate governance mainly consist of several rights, principals, rights and laws by which
several associates are handled in an appropriate way. The main associates and participants that
are involved are directors, creditors, auditors, managers. It is essential for the organisation to
involve and consider the suggestions of all the shareholders while taking or making decision-
making as they act as crucial part of the organisation that helps in raising funds to attain
organisation goals and objectives. Some of the other elements which directly or indirectly
affected by globalisation that are discussed below:
Leadership: A leader act as an influencer that directs its subordinates in order to achieve
organisation goals and objectives. Leaders also motivates their subordinates so that they feel
motivated while performing their duties at workplace effectively. The impact of globalisation
directly effects the strategies, plans, mission and vision that is developed by the leaders. In
concern with SASOL Limited, leaders emphasis of their product distribution by keeping proper
analysis of customers need and requirements.
Structure: Globalisation affect the overall structure of the organisation in various ways.
While introducing various product and services at global level organisation has to set up new
office at new area. In order to establish business in various countries SASOL Limited need to
hire employees or high authorises from same country in which new businesses is established due
to overall structure is affected (Cohen and Kietzmann, 2014).
Culture: Culture is another important element that directly and indirectly influenced by
the globalisation. The overall high authorises and administration of the organisation emphasis on
manufacturing products and services as per as needs and demands of customer. While

introducing new product and services in new countries SASOL Limited should emphasis on
culture issues.
Functions: All the organisation starts their business from domestic country to other
international countries. There may be possibility that organisation has to alter some of their
product and services as per needs of different countries. In context with SASOL, major
alterations is done by the administration which is related to investments, profits, investments or
any other functions (Doh, McGuire and Ozaki, 2015)
P4. Effects of ethical and sustainable globalisation on organisational functions
Today's world is considered as unprecedented transformations due to which many
organisations uses various number of strategies that follows effectively rules and regulations of
countries to run business in right directions. Ethics mainly involves with organisation's moral
that directly involve in influencing staff members behaviour in positive directions. As SASOL
Limited is out looking to expand their business in various countries which includes Canada,
Australia(Epifanova and et. al., 2015). So it is very crucial for SASOL Limited to go through all
the legislations rules and acts in order to understand well about different political and legal
situation to run organisational functions in appropriate manner. All the operational activities
should be carried by using and following ethics in an appropriate manner. Organisation faces
various challenges while expanding the businesses at different global level. It is responsibility of
high authorises and managers to examine various problems and solve them while expanding their
business.
It is crucial to follow and implement business ethics that includes rules and regulations
for planning various marketing strategies. With the help and following the appropriate business
ethics organisations are able to perform well and expand their business at global level. Moreover,
high authorities and managers formulate effective strategies and policies in order to improve
performance of the organisations along with productivity. By following ethical practices and
policies organisations are able to capture high market share and they are able to develop strong
positive image in the market. So, SASOL Limited has should follow appropriate strategy that are
developed by managers in order to gain competitive advantage. By following ethical practices
organisations are able to enhance their profitability level by serving quality products and services
to customers at global level. Therefore, both effect of ethical and suitable globalisation develops
positive impact on the organisational interconnected functions.

TASK 4
P5. Various ways through which decision making can work effectively in global context
In order to improve the profitability and increase productivity rate at global level both
leaders and managers of organisation keep on making changes in the operational activities. It is
duty of SASOL Limited managers and leaders to continuously look forward the strategies and
make modifications according to the requirement on regular basis. As the SASOL Limited is
planning to expand the business in various countries which includes Australia, Canada in order
to sustain well with their products and enhance market share. It is very crucial for the SASOL
Limited to understand well about all the strategies, techniques, tools and technologies that is used
by the competitors so that they can plan for effective decision-making in order to achieve
organisations goals and objectives. Leaders and managers formulates the goals and objectives of
the organisations and they are responsible to assign roles and responsibilities to staff members.
SASOL Limited managers generally uses two type of decision making that are discussed below:
Programmed decision making: By proper locating of previous determined results both
leader as well as mangers take the further decisions. This decision making process is stated as
tested process that gives appropriate final outcomes. It is also involved with different
organisational policies that directly affect the targets in more effective manner. There are some
traditional strategies that is being used and gives positive outcomes. It is important for the
SASOL Limited to locate all the previous planned and implemented decision that gives positive
outcomes (Huhtala and et. al., 2014).
Unprogrammed decision making: Global business firms are nowadays taking a lot of
risks due to which many times high authorises has to take decision at a particular time without
taking much time. The managers has to take quick actions whether it is related to adopting the
new technology or tools in order to enhance the productivity of the organisations.
In order to enlarge business at global level SASOL Limited has to face various problems
so to overcome this, they need to take both types of decisions that is programmed and
unprogrammed decisions.

P6. Assorted routes to internationalisation which can adopt by organisation, including key
barriers
There are various kinds of barriers that comes in the way of organisation development in
order to achieve growth and development. In order to maintain good strong image and reputation
it is important to emphasis on various risks factors so that in future effective actions can be taken
to overcome this barriers that blocks the growth and development of the organisations. In order
to attain competitive advantage in market it is important for the SASOL Limited to focus well on
the operational activities . Merger and joint ventures can help the organisations to gain
competitive advantage and increase the market share at international level. Some of the barriers
that are faced by SASOL Limited are as follows:
 There is crucial need of funding in order to expand the business world wide. Without
proper funds it is nearly impossible to launch and expand the business at international
level. Organisations can take loan from financial generator institutes and banks, then sell
their shareholders through which high funds can be raised.
 The another barrier mainly involves with technology that should be kept well in mind
while entering the new area and market. Technology can bring positive as well as
negative impact on the organisation so it is important to consider appropriate type of
technology while expanding the business.
CONCLUSION
It is concluded from the report that global business environment has various elements that
should be undertaken in an appropriate way by organisation which is looking forward to expand
its business at international level. By following ethical practices organisations are able to
enhance their profitability level by serving quality products and services to customers at global
level. It is essential for the organisation to involve and consider the suggestions of all the
shareholders while taking or making decision-making as they act as crucial part of the
organisation that helps in raising funds to attain organisation goals and objectives.

REFERENCES
Books and Journals
Apăvăloaie, E. I., 2014. The impact of the internet on the business environment. Procedia
Economics and finance. 15. pp.951-958.
Axelrod, R. S. and VanDeveer, S. D. eds., 2014. The global environment: institutions, law, and
policy. CQ Press.
Belás, J. and et. al., 2014. Significant attributes of the business environment in small and
meduim-sized enterprises. Economics & Sociology. 7(3). p.22.
Belás, J. and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
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Carneiro, J. and Brenes, E. R., 2014. Latin American firms competing in the global
economy. Journal of Business Research. 67(5). pp.831-836.
Cavusgil, S. T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities
perspective on early and rapid internationalization. Journal of International Business
Studies. 46(1). pp.3-16.
Cohen, B. and Kietzmann, J., 2014. Ride on! Mobility business models for the sharing
economy. Organization & Environment. 27(3). pp.279-296.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Doh, J., McGuire, S. and Ozaki, T., 2015. The Journal of World Business Special Issue: Global
governance and international nonmarket strategies: Introduction to the special
issue. Journal of World Business. 50(2). pp.256-261.
Epifanova, T. and et. al., 2015. Modernization of institutional environment of entrepreneurship
in Russia for development of innovation initiative in small business
structures. European Research Studies. 18(3). p.137.